Improving expectations, restoring confidence, increasing income, expanding consumption, and stimulating domestic demand will be among the priorities. "After being hit by the latest wave of Covid infections, the primary focus of economic work should be on accelerating economic recovery and promoting normalized production and social orders. According to the Chinese Center for Disease Control and Prevention, the numbers of fever clinic visits nationwide and people hospitalized with Covid peaked in late December and early January, respectively, and have declined since then." "Since Covid controls were optimized at the end of 2022, China has seen a surge in Covid infections. But optimism in the sector continued to improve as businesses expected a post-Covid economic recovery.” “Supply and demand weakened, overseas demand was sluggish, employment declined, and logistics hadn’t fully recovered, while the quantity of purchases shrank, inventories dropped, and manufacturers faced growing pressure on profitability. ![]() “The pandemic continued to take a toll on the economy in January,” said Dr Wang Zhe, an economist at Caixin Insight Group. Buying levels dropped at the slowest pace in 3 months while foreign demand remained weak, falling for the sixth month. Output fell the least in 5 months while a fall in new orders eased. The Caixin Manufacturing Purchasing Managers’ Index (PMI) for China edged up to to 49.2 in January 2023 from a three-month low of 49.0 in December, coming in below market forecasts of 49.5. However, the reading marked the sixth straight month of declining factory activity, amid sluggish operations after an abrupt shift in COVID policy. "In light of the stronger growth and firmer inflation news, we are adding a 25bp (basis points) rate hike in June to our Fed forecast, for a peak funds rate of 5.25%-5.5%," Goldman Sachs economists led by Jan Hatzius said in a note dated Thursday. Goldman Sachs and Bank of America recently said they expect the US Federal Reserve to raise interest rates three more times this year, lifting their estimates after data pointed to persistent inflation and a resilient labor market. What’s more, while demand has climbed, output from copper mines has not kept pace, tightening the supply balance.Īggressive interest rate rises by central banks, including the US Federal Reserve ( Fed), to tackle 40-year-high inflation have increased concerns among traders that the global economy could be facing a hard landing.Īt its 31 January – 1 February policy meeting, the Fed opted to moderate the pace of rate hikes, lifting its benchmark overnight interest rate by a quarter of a percentage point to the 4.50%-4.75% range. The pandemic also saw a boom in demand for manufactured goods, including electronics and household appliances, as consumers turned to home entertainment and home improvement during lockdowns. Higher crude oil and gas prices are raising operational costs for copper producers, but also accelerating the energy transition and in turn increasing copper demand. The transition to clean energy requires larger quantities of copper, which is used for wiring in electric vehicles (EVs) and solar panels. In addition to the recovery in demand after the pandemic, there are several long-term demand trends that have been supportive to copper. The COMEX copper price chart shows that the metal climbed by 130% from the March 2020 low at the start of Covid-19 lockdowns to trade up to $5 a pound in early March 2022. On rising demand and tightening supply, prices for copper – as well as aluminium, tin and zinc – reached record highs in March. Manufacturing plants in Changchun suspended operations and construction work was halted in Shanghai, reducing consumption in the world’s largest copper market.Īt the end of February, traders weighed the impact of the Russia-Ukraine conflict on commodities and stockpiled industrial metals. ![]() The price trend of copper was choppy at the start of the year, as pandemic-related lockdowns across several regions in China raised concerns about a slowdown in economic growth just as industrial production had ramped up following the Lunar New Year holiday. ![]() ![]() In this article, we look at the drivers for the recent market volatility, and examine some copper price predictions from a few analysts. Is the current price a buying opportunity, or would a short position on copper be more profitable?
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